Sudheesh Das vs Employees State Insurance Corporation

A.K. Jayasankaran Nambiar, J.—The petitioner sought admission to the MBBS course conducted by the ESIC Medical Education Institution. He applied for consideration of his candidature under the quota earmarked for ESIC management quota. In Ext. P2 admission notice, inviting applications from candidates for the MBBS Course, under the category of "Wards of Insured Persons", the criteria for qualification as an insured person is given as follows:

"8. Insured person for the purpose of availing benefit ESIC Management Quota for his/her wards shall be, as under

''The Insured person'' shall be an ''employee'' as defined in the ESI Act; and he/she should have been in continuous insurable employment for a period of five years as on 1st January of the year of admission and should have paid at least 78 days of contribution in each contribution period, during this five year period".

The petitioner''s father is an employee in the Aluminium Industries Ltd., and admittedly a person who is under the coverage of the Employees State Insurance Scheme under the Employees State Insurance Act, 1948. When the petitioner approached the 4th respondent for a certificate stating that he was a "Ward of an Insured Person", for the purposes of Ext. P2 notice, he was informed that he could not be considered as such owing to the fact that his father had proceeded on leave for the period from 13.05.2009 to 13.10.2009 in connection with illness and therefore had not paid at least 78 days of contribution during the contribution period from 01.04.2009 to 30.09.2009. It was aggrieved by the said stand taken by the respondents that the petitioner approached this Court through the present writ petition seeking inter alia, a declaration that Clause 8 of Annexure-1 of Ext. P2 is ultra vires Article 14 and 15 of the Constitution of India and hence, unenforceable, to the extent it ignores the period for which an employee was absent from service due to medical reason and for which the benefits under the ESI Act were made available for treating the employee as an insured person. There is a further prayer for a direction to the respondents to consider the petitioner as a ward of an insured person for the purposes of Ext. P2 and to consider him for admission to the MBBS Course under the ESI Medical Colleges, in the quota for wards of insured persons under the ESIC management quota.

When the matter came up for admission, this Court while admitting the matter also issued a direction to the 4th respondent to issue a ward of insured person certificate specific to the petitioner. The 1st respondent was also directed to consider the application of the petitioner without disqualifying the petitioner for the reason that the petitioner''s father did not have 78 days in each contribution period mentioned in Ext. P2. It was further made clear that the consideration of the petitioner''s candidature would be provisional and subject to further orders from this Court. It is brought to my notice by counsel for the petitioner that on the strength of the interim order granted by this Court, the petitioner''s candidature was considered and he was allotted to a College in Bangalore.

A counter affidavit has been filed on behalf of respondents 1 to 4 wherein they seek to maintain that in view of the fact that the petitioner''s father did not pay the stipulated 78 days of contribution during the contribution period between 01.04.2009 to 30.09.2009, the petitioner could not be considered as the ward of an insured person for the purposes of Ext. P2 and hence he could not claim the benefit available to the wards of insured person for the purposes of accommodation under the ESIC management quota. It is also pointed out that while this Court had on an earlier occasion interpreted the scope of the very same condition in Ext. P2 notice in the judgment reported in Remya Krishnan R. v. Employees'' State Insurance Corporation and Others (2013 KHC 3697), the said decision was carried in appeal up to the Supreme Court and by Ext. P8 judgment, the Supreme Court had indicated that it was not expressing any opinion on Clause 8 of the prospectus and to this extent, the findings in the judgment of the Single Judge referred to above could not be sustained.

I have heard Sri. M.R. Hariraj, the learned counsel appearing for the petitioner as also Sri. Sandesh Raja, the learned counsel appearing on behalf of respondents 1 to 4.

On a consideration of the facts and circumstances of the case and also the submissions made across the Bar, I find that as per Clause 8 of Annexure-1 of Ext. P2, for a person to qualify as an insured person for the purposes of the ESIC management quota, he has to be an employee as defined in the ESI Act. He or she should also have been in continuous insurable employment for a period of five years as on 1st January of the year of admission. Thirdly, he should have paid at least 78 days of contribution in each contribution period during the aforementioned five year period. It is only if an employee complies with the aforementioned requirements that he will be treated as an insured person and consequently, his ward given the benefit of staking a claim for admission under the ESIC management quota. It is relevant to note in this case that the requirement of having to pay at least 78 days of contribution in each contribution period is one that is expected of an employee. As per the Scheme of the ESI Act, contributions have to be made both by the employer and the employee for particular contribution periods and the rates at which the said contributions are to be made is provided for under the ESI (Central) Rules, 1950. The rates of contribution are computed at a percentage of the wages payable to an employee. As long as there is a payment of wages to an employee during a particular contribution period, there will be a corresponding obligation on the employer and the employee under the Act for effecting the contribution. In respect of the contribution made during a particular contribution period, there are benefits envisaged to the employee in question for the benefit period corresponding to each contribution period. Rule 55 of the ESI (Central) Rules, 1950 contemplates that if in any contribution period an employee does not effect contribution for at least 78 days in the contribution period, he will not get the sickness benefit in terms of that Rule for the corresponding benefit period. The provisions of Clause 8 of Annexure-1 to Ext. P2 are worded almost similarly to the disabling Clause in Rule 55 of the ESI (Central) Rules 1950. The question to be considered is whether, while granting the benefit to wards of insured persons for the purposes of claiming admission under a particular quota, it could have been the intention of the ESI Corporation to exclude the wards of those employees who, on account of their being away from work consequent to illness, could not make the stipulated 78 days contribution in a contribution period. The very same issue came up for consideration before this Court on an earlier occasion and in the decision reported in Remya Krishnan. R. v. Employees'' State Insurance Corporation and Others (2013 KHC 3697), the learned Single Judge of this Court observed as under:

"Going by the Scheme of the statute, particularly being a Welfare Legislation, on establishing ''Sickness'', a portion of the wages is made available to the beneficiary during the ''Sickness Period'' and even in cases where ''Sickness benefit, is not payable under the relevant provisions, other eligible benefits are not liable to be denied. The reservation under the "Management Quota" for the "Ward of the Insured Person" is with a definite purpose and there is no fault or lapse on the part of the petitioner herein, whose rights to be considered in the "Management Quota", cannot be simply thrown to wind by giving a hyper-technical interpretation to the provisions contained in the Prospectus, stipulating a minimum of ''78 days'' contribution period'', for each wage period during the past 5 years; which in fact is applicable only in respect of ''Sickness benefit'' payable to the insured person.

A stalemate has been created because of the mechanical incorporation/reproduction of the Clause (as it appears in Rule 55) when it came to be incorporated under paragraph ''8'' of Annexure I in Ext. P3 Admission policy. The consequence resulted because of such mechanical application, is quite disastrous, as evident from the instant case, whereby, the petitioner, by virtue of her merits, ought to have been placed in front of the queue, but came to be omitted so as to give way to ''61'' other persons who were standing far behind on merit, who were fortunate that their parent did not suffer any Sickness and came to be included in the select list out of ''62 candidates declared as eligible. The remaining 100 seats admittedly could not be filled up and the same had to be surrendered to the respective States, which course has defeated the purpose of reservation provided to the "Ward of the Insured Person", intended to serve as a welfare measure to be given to the deserving lot, i.e., the beneficiaries of a welfare legislation.

After hearing both the sides, this Court finds that, a meritorious candidate like the petitioner ought not to have been left out and the deficit of ''3'' days in respect of a single wage period from 01.04.2009 to 30.09.2009, ought to have been supplemented with the days covered by Ext. P8 reckoned by the respondent/ESI Corporation for granting the ''Sickness benefit'' under Section 46 of the Act r/w Rule 55 of the Rules. This Court earnestly hopes that, necessary correction/modification as to the relevant Clause in the Prospectus would be effected by the respondent Corporation from the next year onwards, so as to have clarify and transparency and to make available the desired benefit to the deserving lot."

It would be seen from the above extracted portion of the said judgment that the learned Single Judge took the view that the interpretation of Clause 8 in the manner suggested by the respondent Corporation would have the undesirable effect of depriving meritorious candidates from a consideration under the ESIC management quota solely on account of the fact that they were the wards of employees who could not make a contribution on account of their illness. On the facts of the present case, I am inclined to follow the view adopted by the learned Single Judge in the aforementioned decision.

No doubt, the learned counsel for the respondents would vehemently contend that in Ext. P8 judgment of the Supreme Court, which was passed in the appeal that was preferred by the petitioner, in the decision noted above, against that portion of the judgment of the Division Bench which opined that in view of the time frame stipulated by the Supreme Court in the matter of admission to Medical Colleges there could not be any relaxation for the purposes of accommodating any particular candidate, the Supreme Court had also incidentally observed that they have not expressed any opinion on Clause 8 of the prospectus adverted to by the counsel for ESI Corporation and that the said order would not be treated as precedent in any other case. The contention of the respondents, in other words, is that in view of the fact that the Supreme Court in Ext. P8 judgment, had chosen not to express any opinion on Clause 8 of the prospectus, the findings in the judgment of the learned Single Judge referred to above, as regards interpretation to be placed on Clause 8 of the prospectus, would no longer survive. I am unable to accept the said contention advanced on behalf of the respondent Corporation. The matter that reached the Supreme Court was an appeal that was preferred by the petitioner in the aforementioned case challenging a decision of the Division Bench which found against her in the matter of extension of the dates stipulated by the Supreme Court for completing the admission process. It is trite that in any appeal, the subject matter of the appeal is only that part of the order or judgment of the court below as is impugned. It is not in dispute that the only portion of the Division Bench judgment that was impugned before the Supreme Court was the portion that dealt with the extension of dates for completing the admission process. The finding of the learned Single Judge in the decision noted above on the issue of interpretation of Clause 8 was never impugned before the Supreme Court and hence Ext. P8 order of the Supreme Court cannot be seen as nullifying the judgment of the learned Single Judge on the interpretation to be placed on Clause 8.

In the light of the above discussion, I am of the view that the writ petition must succeed. Accordingly, it is declared that Clause 8 of Annexure-1 to Ext. P2 cannot be read in a manner as to exclude the candidature of the petitioner for the sole reason that his father, who is an employee for the purposes of the ESI Act, had not paid the stipulated 78 days of contribution for the contribution period from 01.04.2009 to 30.09.2009. The admission already given to the petitioner on the strength of the interim order of this Court will therefore be treated as regular and legal.

The writ petition is allowed as above.